News UpdateThe NationTop Stories

Contract violations may stall Nigeria’s LNG expansion plan

The Nigeria LNG is currently challenging the enforceability of an arbitral award’s demand order issued by a United Kingdom arbitration panel despite a contractual provision that makes an award by the arbitral tribunal final and binding. Nigeria LNG was held to be in breach of contract by failing to deliver 19 cargoes under a contract executed in January 2020. The cargo was due for delivery between October 2020 and October 2021. The arbitration tribunal comprised Mr John Beechey CBE, Mr J William Rowley KC and Mr Nevil Phillips. In a related development, Shell Plc has made claims against Venture Global LNG (VGL), a U.S-based LNG exporter, for its breach of contract to supply LNG cargoes. According to a Reuters report, Shell Plc has escalated its dispute with Venture Global LNG. It accused the liquefied natural gas producer of restricting supply access to it and other customers while exporting over $18 billion in LNG, costing Shell and other European companies Billions in lost profits. According to a media report, Shell Chief Executive Wael Sawan is “very disappointed” with U.S. player Venture Global LNG over the non-delivery of contractual gas volumes from its Calcasieu Pass export project in Louisiana. He argued that its actions could undermine confidence in US LNG supplies, claiming that Venture Global chose to sell LNG cargoes to the often lucrative spot market. Shell Executive Vice President Steve Hill, at the recent Gastech event, added: “This (contract breach) is a wake-up call for the industry. The LNG business is underpinned by trust in long-term contracts. If contracts are seen as options for suppliers, then buyers simply won’t sign them, and the industry won’t grow.”

Comment here

I accept the Terms and Conditions and the Privacy Policy